UK consumers hunt out mortgage bargains
21 March 2003
With competition hotting up between mortgage providers to provide the best rates for homebuyers, almost a quarter (23 per cent) of UK mortgage holders are considering changing their deal over the next 12 months.
According to the Alliance & Leicester's movingimproving index home owners are becoming increasingly more confidant about shopping around for the best deals and even changing mortgage provider if their own doesn't measure up.
Advisors are suggesting to mortgage holders that they review their mortgage deals and compare them to fixed and discounted rates, currently at their lowest points in years.
The Council of Mortgage Lenders has revealed that remortgaging is also on the increase as UK debt levels continue to rise.
According to the CML, remortgaging accounted for 52 per cent (£9.6 billion) of new lending in January, breaking through the 50 per cent barrier for the first time.
Paul Cooper, Head of Mortgages at Alliance & Leicester, commented, 'The increased competition we are seeing in the mortgage market is great news for those thinking of buying and those thinking of shopping around for a better deal.'
But, he advised consumers, 'Whilst re-mortgaging will often mean lower mortgage repayments, people should take a sensible approach and look for an offer that suits their individual needs and not just the headline rate.'
The Alliance & Leicester survey found that eight per cent of mortgage holders are definitely planning to change their mortgage in the next 12 months, with a further 15 per cent saying they might do so.
The remaining 77 per cent, however, have no intention of changing their mortgage.
Getting a better rate was the most popular reason given for changing mortgages, with 60 per cent of those planning to switch looking for a better deal.
Of the remainder 23 per cent were planning to purchase a new home and eight per cent were unhappy with the service provided by their mortgage lender.
The study looked at a representative sample of 2,000 people across the UK and found that men, people who were married and those in their thirties were most likely to be considering remortgaging.
After the heavily publicised problems with endowment mortgages last year that left homeowners unable to pay back the costs of their homes, five per cent of respondents were switching from endowment mortgages.